CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Levels to watch: FTSE 100, DAX and Dow

The FTSE 100 and DAX are busy challenging crucial resistance levels following recent gains. Meanwhile, the Dow is showing signs of a potential retracement within a wider recovery.

IG Analyst

Publication date : 2018-04-19T09:46:40+0100

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FTSE 100 rallying into historical resistance

The FTSE 100 has continued its recent ascent, with the price breaking towards a crucial resistance level today. This is going to be the key line in the sand for the pair, with a break above that level providing a two-month high.

However, more importantly, such a break would be hugely significant for negating the wider bearish trend that has been in play throughout much of 2018. With that in mind, watch for 7340 as the crucial level to watch, with the potential for a breakout or reversal to set us up for the end of the week’s trade.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX falling back into wedge support

The DAX managed to push tentatively through the 12,612 swing high, providing a bullish signal to mark the end of the wider downtrend seen throughout recent months. With the price trading ever closer to an ascending wedge apex, we will have to see a breakout soon.

Given the inability (so far) to break through that 12,612 level with any gusto, there is a chance we could see the index move into retracement mode. However, for that to happen, it makes sense to await a break below 12,376 as a bearish signal. Alternately, a rally through 12,612 would provide us with a potential bullish continuation signal for the near term.

DAX chart

DAX chart

DAX chart

Dow breakout could bring near term retracement

The Dow Jones has been breaking higher from its own downtrend, with the push above 24,637 (and in turn the 76.4%) providing us with a signal that we are likely to break above the all-important 24,984.

For now it looks like we could see a short-term pullback, with an hourly close below 24,717 required to provide an immediate bearish signal. However, any such short-term downside would be expected to simply retrace the 24,243-24,860 rally before moving higher once again.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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